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108 OG No. 15, 1646 (April 9, 2012)
SECOND DIVISION
[ CV No. 88930, February 28, 2008 ]
TERESITA C. ALISASIS, PLAINTIFF-APPELLEE, VS. RAFAEL Z. DULALIA, DEFENDANT-APPELLANT.
DECISION
Defendant appeals from the Decision dated July 27, 2006[1] rendered by the Regional Trial Court (RTC) of Caloocan City, Branch 122 dismissing his Counterclaim in Civil Case No. C-20872 entitled "TERESITA C. ALISASIS, Plaintiff, versus, RAFAEL Z. DULALIA, ET. AL., Defendants" for Quieting of Title and Damages, thus:
In her Complaint for Quieting of Title and Damages[2] filed on August 15, 2004 against the Defendant-Appellant Rafael Z. Dulalia and his co-defendants, namely: Atty. Regulo B. Coloma, former Register of Deeds of Caloocan City; Atty. Ferdinand U. Valbuena; and the incumbent Register of Deeds of Caloocan City in his/her official capacity, Plaintiff-Appellee Teresita C. Alisasis alleged that she is the lawful owner of Lot 534 registered in her name under Transfer Certificate of Title (TCT) No. 361269[3] with an area of 46,604 square meters located at Tala Estate in Caloocan City. Lot 534 was formerly registered under TCT No. 15715[4] in the name of Diega Zuniga married to Pablo Dulalia Jr., herein appellant's parents. On March 28, 1958, Spouses Dulalia, Jr. conveyed Lot 534 by virtue of a Deed of Absolute Sale[5] in favor of Salvador Veloso in the amount of One Hundred Ten Thousand Pesos (PHP110,000.00). On September 4, 2002, Marlina V. Veloso,[6] heir and daughter of Salvador Veloso,[7] sold Lot 534 by virtue of a Deed of Absolute Sale[8] in her favor for Thirteen Million Nine Hundred Eighty One Thousand Two Hundred Pesos (PHP13,981,200.00). Within the same month, Alisasis sought the cancellation of TCT No. 15715 with the Registry of Deeds of Caloocan City and on September 30, 2002, TCT No. 361269 covering Lot No. 534 was issued in her name as attested by the former Register of Deeds defendant Atty. Regulo B. Coloma. Alisasis further alleged that on February 6, 2003, defendant-appellant Rafael Z. Dulalia caused the annotation of an adverse claim[9] in TCT No. 361269 claiming that he is the lawful owner of the property covered by TCT No. 361269 which claim was allegedly anomalously procured through falsification of documents by Atty. Coloma and the then Branch Clerk of Court defendant Atty. Ferdinand U. Valbuena of RTC Caloocan City Branch 126; that both Coloma and Valbuena demanded money from plaintiff to facilitate the issuance of the TCT in her name; and that the said anomaly and the adverse claim of Dulalia cast a cloud of doubt on TCT No. 361269. Plaintiff prayed that the incumbent Register of Deeds of Caloocan City be directed to cancel the adverse claim of the appellant annotated in TCT No. 361269 and to declare her as an innocent purchaser for value. She also prayed for the court to order the Register of Deeds to cancel TCT No. 361269 and issue a new TCT in her name, and to order appellant Dulalia, Atty. Coloma and Atty. Valbuena to pay moral and exemplary damages, and attorney's fees.
In his Answer with Counterclaim dated June 25, 2004,[10] Dulalia alleged that he is one of the lawful heirs of spouses Diega Zuniga and Pablo Dulalia; that TCT No. 15715 is not lost and in fact in his possession; that when he was about to pay the 4th quarter real property tax for 2002, he was informed that TCT No. 15715 was already transferred to Alisasis under TCT No. 36129; that he discovered that the reason for the transfer was the Deed of Absolute Sale dated September 30, 2002 executed between Diega Zuniga and Alisasis. Dulalia contended that there are irregularities attending the issuance of TCT No. 361269, namely; (a) that his father's signature does not appear in the Deed of Absolute Sale; (b) that the said Deed as basis of the transfer could not have been executed as his mother died December 30, 2002; and (c) the Certificate Authorizing Registration (CAR)[11] issued by the Bureau of Internal Revenue (BIR) presented by Alisasis for the issuance of TCT No. 361269 was not actually issued by the BIR[12] because it was issued three (3) days ahead of the Deed of Absolute Sale; that because of these irregularities, he filed a criminal case dated March 24, 2003[13] with the Office of the City Prosecutor of Caloocan City, charging the appellee and Atty. Coloma with Falsification of Public Document and Use of Falsified Document; and that on October 10, 2003, the Office of the City Prosecutor filed an Information against appellee and Atty. Coloma for Falsification of Public Documents.[14]
In his Counterclaim, Dulalia prayed for the following reliefs:
Thereafter, on March 3, 2006, Dulalia was allowed to present evidence ex-parte in support of his counterclaim consisting, among others, of the following:[17]
However, in the appealed Decision dated July 27, 2006, the trial court denied Dulalia's counterclaim for lack of sufficient evidence. Likewise, the trial court denied for lack of merit Dulalia's prayer to declare TCT No. 361269 null and void and to reinstate TCT No. 15715. The trial court ratiocinated that Dulalia's counterclaim cannot be allowed as it constitutes a collateral attack upon a certificate of title, whether or not it was fraudulently issued; that any question as to the validity of plaintiff's title can only be raised in an action expressly instituted for that purpose.
Appellant's Motion for Reconsideration dated September 11, 2006[32] of the Decision was denied by the trial court on April 4, 2007.[33]
Hence, this appeal with the following assignment of errors:
We shall address the focal issue of whether or not the dismissal of Dulalia's counterclaim as it amounted to a collateral attack on TCT No. 361269 is erroneous.
Section 48 of the Property Registration Decree (PD1529) provides that a certificate of title cannot be subject to a collateral attack. It cannot be altered, modified, or canceled except in a direct proceeding in accordance with law. The issue of the validity of title, i.e., whether or not it was fraudulently issued, can only be raised in an action expressly instituted for that purpose.[35] A certificate of title, once registered, should not thereafter be impugned, altered, changed, modified, enlarged or diminished, except in a direct proceeding permitted by law. Otherwise, the reliance on registered titles would be lost.[36]
The foregoing notwithstanding, the rule is that an action is considered a direct attack on title if its object is to nullify the same, and thus challenge the proceeding pursuant to which the title was decreed.[37] Such an action to attack a certificate of title may be an original action or a counterclaim in which a certificate of title is assailed as void. A counterclaim is considered a new suit in which the defendant is the plaintiff and the plaintiff in the complaint becomes the defendant. It stands on the same footing and is to be tested by the same rules as if it were an independent action.[38] In Development Bank of the Philippines vs. Court of Appeals, the Supreme Court had occasion to rule on the validity of a certificate of title despite the fact that the nullity thereof was raised by way of a counterclaim. It was held that a counterclaim is considered a complaint, only this time it is the original defendant who becomes the plaintiff.[39]
In the case at bench, Dulalia's counterclaim was precisely raised for the purpose of attacking the validity of TCT No. 361369. It directly sought the nullification of TCT No. 361369 and was not a mere incident to the filing of the counterclaim; hence, Dulalia's counterclaim is not a collateral attack. His counterclaim can stand as an independent action even without the Complaint filed by Alisasis. The trial court thus erred in declaring that the counterclaim was a collateral attack on the title. Instead of requiring Dulalia to file a separate action to attack the nullity of TCT No. 361369, the trial court should have considered the evidence presented to determine if it warrants the nullification of TCT No. 361369 and the reinstatement of TCT No. 15715.
Be that as it may, We cannot rule on the nullity of Alisasis' title despite the evidence before Us. It must be noted that from the records, Alisasis had filed her Answer to the Counterclaim[40] and since the counterclaim is considered a complaint, the Order of Trial provided in the Rules of Civil Procedure should have been followed. Following the Order of Trial provided in Section 5, Rule 30 of the Rules of Civil Procedure, the trial court should have also allowed Alisasis to present her evidence against the counterclaim.[41] It was thus erroneous for the trial court to allow Dulalia to present his evidence ex-parte and thereby deprive Alisasis of her right to participate in the trial of the counterclaim, not having been declared in default by the trial court. A proper disposition of the case is only possible if there is no violation of due process and a full blown trial of the case is conducted in accordance with the Rules of Civil Procedure.
We deem it unnecessary, if not inappropriate, to dwell on the other errors assigned by the appellant for the reason that resolution of the same will come to light only upon the termination of the trial of this case in accordance with the foregoing observations.
Wherefore, the case is hereby remanded to the trial court for further proceedings and presentation of evidence.
SO ORDERED.
Bersamin and Perlas-Bernabe, JJ., concur.
[1] Annex "1" Rollo, pp. 30-35.
[2] Record, pp. 1-7.
[3] Annex "7" Rollo, pp. 52-53.
[4] Annex "4" Id., pp. 48-50.
[5] Records, pp. 13-14.
[6] Also referred to as Marlina Veloso-Galenzog.
[7] Waiver of Rights over Lot 534 dated September 10, 1993 in favor Marlina Veloso executed by her siblings Socorro V. Regana, Jose Veloso and Lourdes V. Villanueva, Id., pp. 15-16.
[8] Id., pp. 17-18.
[9] Affidavit of Adverse Claim by the appellant, Id., p. 19-20.
[10] Annex "10" Rollo, pp. 55-60.
[11] Record p. 46.
[12] Certification from the BIR denying issuance of CAR relative to the alleged sale of Lot 534 between Diega Zuniga and the appellee, Id., p. 47.
[13] Appellant's Complaint Affidavit, Id., p. 84.
[14] Id., p. 191.
[15] Id., p. 117.
[16] Id., p. 163.
[17] Also, see Formal Offer of Evidence by Dulalia Id., pp. 175-178.
[18] Exhibit "1" Id., pp. 179-181
[19] Exhibit "2" Id., p. 182.
[20] Exhibit "3" Id., p. 183.
[21] Exhibit "3-a" Id., p. 184
[22] Exhibit "3-b" Id., p. 185.
[23] Exhibit "4" Id., p. 186.
[24] Exhibit "5" d., p. 187.
[25] Exhibit "5-d" Id., p. 188.
[26] Annex "E" of Alisasis Complaint, Id., pp. 19-20.
[27] Exhibit "8" Id., p. 191.
[28] Exhibit "11" Id., p. 196.
[29] Exhibit "11-b" Id., p. 197.
[30] Exhibit "12" Id., p. 199.
[31] Annex "11" Rollo, p. 74.
[32] Annex "2" Id., pp. 36-45.
[33] Annex "3" Id., p. 47.
[34] Id., pp. 22-23.
[35] Eduarte vs. Court of Appeals, 311 SCRA 18 and Lagrosa vs. Court of Appeals, 312 SCRA 298.
[36] Spouses Zaragosa vs. Court of Appeals, 341 SCRA 309 and Ladignon v. Court of Appeals, 336 SCRA 42. Also See Apostol vs. Court of Appeals, 432 SCRA 351.
[37] Leyson vs. Bontuyan, 452 SCRA 94, 2005.
[38] Pro Line Sports Center, Inc. vs. Court of Appeals, 281 SCRA 16, 1997.
[39] 331 SCRA 267, 2000.
[40] Records, Dp. 58-59.
[41] Section 5, Rule 30 of the Rules of Civil Procedure provides that subject to the provisions of section of Rule 31, and unless the court for special reasons otherwise directs, the trial shall be limited to the issues stated in the pre-trial order and shall proceed as follows:
a. The plaintiff shall adduce evidence in support of his complaint;
b. The defendant shall then adduce evidence in support of his defense, counterclaim, cross-claim and third-party complaint;
c. The third-party defendant, if any, shall adduce evidence of his defense, counterclaim, cross-claim and fourth-party complaint;
d. The fourth-party; and so forth, if any, shall adduce evidence of the material facts pleaded by them:
e. The parties against whom any counterclaim or cross-claim has been pleaded, shall adduce evidence in support of their defense, in the order to be prescribed by the court. (Emphasis ours).
"WHEREFORE, premises considered, the defendant's counterclaim is hereby is dismissed for lack of sufficient evidence."The facts:
In her Complaint for Quieting of Title and Damages[2] filed on August 15, 2004 against the Defendant-Appellant Rafael Z. Dulalia and his co-defendants, namely: Atty. Regulo B. Coloma, former Register of Deeds of Caloocan City; Atty. Ferdinand U. Valbuena; and the incumbent Register of Deeds of Caloocan City in his/her official capacity, Plaintiff-Appellee Teresita C. Alisasis alleged that she is the lawful owner of Lot 534 registered in her name under Transfer Certificate of Title (TCT) No. 361269[3] with an area of 46,604 square meters located at Tala Estate in Caloocan City. Lot 534 was formerly registered under TCT No. 15715[4] in the name of Diega Zuniga married to Pablo Dulalia Jr., herein appellant's parents. On March 28, 1958, Spouses Dulalia, Jr. conveyed Lot 534 by virtue of a Deed of Absolute Sale[5] in favor of Salvador Veloso in the amount of One Hundred Ten Thousand Pesos (PHP110,000.00). On September 4, 2002, Marlina V. Veloso,[6] heir and daughter of Salvador Veloso,[7] sold Lot 534 by virtue of a Deed of Absolute Sale[8] in her favor for Thirteen Million Nine Hundred Eighty One Thousand Two Hundred Pesos (PHP13,981,200.00). Within the same month, Alisasis sought the cancellation of TCT No. 15715 with the Registry of Deeds of Caloocan City and on September 30, 2002, TCT No. 361269 covering Lot No. 534 was issued in her name as attested by the former Register of Deeds defendant Atty. Regulo B. Coloma. Alisasis further alleged that on February 6, 2003, defendant-appellant Rafael Z. Dulalia caused the annotation of an adverse claim[9] in TCT No. 361269 claiming that he is the lawful owner of the property covered by TCT No. 361269 which claim was allegedly anomalously procured through falsification of documents by Atty. Coloma and the then Branch Clerk of Court defendant Atty. Ferdinand U. Valbuena of RTC Caloocan City Branch 126; that both Coloma and Valbuena demanded money from plaintiff to facilitate the issuance of the TCT in her name; and that the said anomaly and the adverse claim of Dulalia cast a cloud of doubt on TCT No. 361269. Plaintiff prayed that the incumbent Register of Deeds of Caloocan City be directed to cancel the adverse claim of the appellant annotated in TCT No. 361269 and to declare her as an innocent purchaser for value. She also prayed for the court to order the Register of Deeds to cancel TCT No. 361269 and issue a new TCT in her name, and to order appellant Dulalia, Atty. Coloma and Atty. Valbuena to pay moral and exemplary damages, and attorney's fees.
In his Answer with Counterclaim dated June 25, 2004,[10] Dulalia alleged that he is one of the lawful heirs of spouses Diega Zuniga and Pablo Dulalia; that TCT No. 15715 is not lost and in fact in his possession; that when he was about to pay the 4th quarter real property tax for 2002, he was informed that TCT No. 15715 was already transferred to Alisasis under TCT No. 36129; that he discovered that the reason for the transfer was the Deed of Absolute Sale dated September 30, 2002 executed between Diega Zuniga and Alisasis. Dulalia contended that there are irregularities attending the issuance of TCT No. 361269, namely; (a) that his father's signature does not appear in the Deed of Absolute Sale; (b) that the said Deed as basis of the transfer could not have been executed as his mother died December 30, 2002; and (c) the Certificate Authorizing Registration (CAR)[11] issued by the Bureau of Internal Revenue (BIR) presented by Alisasis for the issuance of TCT No. 361269 was not actually issued by the BIR[12] because it was issued three (3) days ahead of the Deed of Absolute Sale; that because of these irregularities, he filed a criminal case dated March 24, 2003[13] with the Office of the City Prosecutor of Caloocan City, charging the appellee and Atty. Coloma with Falsification of Public Document and Use of Falsified Document; and that on October 10, 2003, the Office of the City Prosecutor filed an Information against appellee and Atty. Coloma for Falsification of Public Documents.[14]
In his Counterclaim, Dulalia prayed for the following reliefs:
"WHEREFORE, it is respectfully prayed for this Honorable Court that judgment be rendered:On November 15, 2004, the Complaint against Atty. Valbuena was dismissed by the trial court for failure to state a cause of action against him.[15] On February 27, 2006, the trial court ordered the dismissal of the Alisasis' Complaint against Atty. Coloma and Dulalia for failure to prosecute.[16]DEFENDANT prays for such other reliefs or remedies just and equitable under the circumstances.
- Declaring Transfer Certificate No. C-361269 in the name of Teresita C. Alisasis, null and void, directing defendant Registry of Deeds of Caloocan City to cancel the same and to reinstate Transfer Certificate of Title No. 15715.
- Ordering plaintiff to pay defendant the amount of P500,000.00, representing his expenses for the investigation, fencing and filing of the criminal complaint.
- Ordering plaintiff to pay defendant the amounts:
actual damages moral damages exemplary damages Total - Ordering plaintiff to pay defendant the amount of P200,000.00 plus P5,000.00 per court appearance as and by way of attorney's fees.
- Dismiss plaintiffs complaint and she pays cost of suit.
Thereafter, on March 3, 2006, Dulalia was allowed to present evidence ex-parte in support of his counterclaim consisting, among others, of the following:[17]
On June 2, 2006, the trial court issued an Order admitting the evidence presented in support of Dulalia's counterclaim.[31]
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
However, in the appealed Decision dated July 27, 2006, the trial court denied Dulalia's counterclaim for lack of sufficient evidence. Likewise, the trial court denied for lack of merit Dulalia's prayer to declare TCT No. 361269 null and void and to reinstate TCT No. 15715. The trial court ratiocinated that Dulalia's counterclaim cannot be allowed as it constitutes a collateral attack upon a certificate of title, whether or not it was fraudulently issued; that any question as to the validity of plaintiff's title can only be raised in an action expressly instituted for that purpose.
Appellant's Motion for Reconsideration dated September 11, 2006[32] of the Decision was denied by the trial court on April 4, 2007.[33]
Hence, this appeal with the following assignment of errors:
The appeal has merit.
First Error - Second Error - Third Error -
We shall address the focal issue of whether or not the dismissal of Dulalia's counterclaim as it amounted to a collateral attack on TCT No. 361269 is erroneous.
Section 48 of the Property Registration Decree (PD1529) provides that a certificate of title cannot be subject to a collateral attack. It cannot be altered, modified, or canceled except in a direct proceeding in accordance with law. The issue of the validity of title, i.e., whether or not it was fraudulently issued, can only be raised in an action expressly instituted for that purpose.[35] A certificate of title, once registered, should not thereafter be impugned, altered, changed, modified, enlarged or diminished, except in a direct proceeding permitted by law. Otherwise, the reliance on registered titles would be lost.[36]
The foregoing notwithstanding, the rule is that an action is considered a direct attack on title if its object is to nullify the same, and thus challenge the proceeding pursuant to which the title was decreed.[37] Such an action to attack a certificate of title may be an original action or a counterclaim in which a certificate of title is assailed as void. A counterclaim is considered a new suit in which the defendant is the plaintiff and the plaintiff in the complaint becomes the defendant. It stands on the same footing and is to be tested by the same rules as if it were an independent action.[38] In Development Bank of the Philippines vs. Court of Appeals, the Supreme Court had occasion to rule on the validity of a certificate of title despite the fact that the nullity thereof was raised by way of a counterclaim. It was held that a counterclaim is considered a complaint, only this time it is the original defendant who becomes the plaintiff.[39]
In the case at bench, Dulalia's counterclaim was precisely raised for the purpose of attacking the validity of TCT No. 361369. It directly sought the nullification of TCT No. 361369 and was not a mere incident to the filing of the counterclaim; hence, Dulalia's counterclaim is not a collateral attack. His counterclaim can stand as an independent action even without the Complaint filed by Alisasis. The trial court thus erred in declaring that the counterclaim was a collateral attack on the title. Instead of requiring Dulalia to file a separate action to attack the nullity of TCT No. 361369, the trial court should have considered the evidence presented to determine if it warrants the nullification of TCT No. 361369 and the reinstatement of TCT No. 15715.
Be that as it may, We cannot rule on the nullity of Alisasis' title despite the evidence before Us. It must be noted that from the records, Alisasis had filed her Answer to the Counterclaim[40] and since the counterclaim is considered a complaint, the Order of Trial provided in the Rules of Civil Procedure should have been followed. Following the Order of Trial provided in Section 5, Rule 30 of the Rules of Civil Procedure, the trial court should have also allowed Alisasis to present her evidence against the counterclaim.[41] It was thus erroneous for the trial court to allow Dulalia to present his evidence ex-parte and thereby deprive Alisasis of her right to participate in the trial of the counterclaim, not having been declared in default by the trial court. A proper disposition of the case is only possible if there is no violation of due process and a full blown trial of the case is conducted in accordance with the Rules of Civil Procedure.
We deem it unnecessary, if not inappropriate, to dwell on the other errors assigned by the appellant for the reason that resolution of the same will come to light only upon the termination of the trial of this case in accordance with the foregoing observations.
Wherefore, the case is hereby remanded to the trial court for further proceedings and presentation of evidence.
SO ORDERED.
Bersamin and Perlas-Bernabe, JJ., concur.
[1] Annex "1" Rollo, pp. 30-35.
[2] Record, pp. 1-7.
[3] Annex "7" Rollo, pp. 52-53.
[4] Annex "4" Id., pp. 48-50.
[5] Records, pp. 13-14.
[6] Also referred to as Marlina Veloso-Galenzog.
[7] Waiver of Rights over Lot 534 dated September 10, 1993 in favor Marlina Veloso executed by her siblings Socorro V. Regana, Jose Veloso and Lourdes V. Villanueva, Id., pp. 15-16.
[8] Id., pp. 17-18.
[9] Affidavit of Adverse Claim by the appellant, Id., p. 19-20.
[10] Annex "10" Rollo, pp. 55-60.
[11] Record p. 46.
[12] Certification from the BIR denying issuance of CAR relative to the alleged sale of Lot 534 between Diega Zuniga and the appellee, Id., p. 47.
[13] Appellant's Complaint Affidavit, Id., p. 84.
[14] Id., p. 191.
[15] Id., p. 117.
[16] Id., p. 163.
[17] Also, see Formal Offer of Evidence by Dulalia Id., pp. 175-178.
[18] Exhibit "1" Id., pp. 179-181
[19] Exhibit "2" Id., p. 182.
[20] Exhibit "3" Id., p. 183.
[21] Exhibit "3-a" Id., p. 184
[22] Exhibit "3-b" Id., p. 185.
[23] Exhibit "4" Id., p. 186.
[24] Exhibit "5" d., p. 187.
[25] Exhibit "5-d" Id., p. 188.
[26] Annex "E" of Alisasis Complaint, Id., pp. 19-20.
[27] Exhibit "8" Id., p. 191.
[28] Exhibit "11" Id., p. 196.
[29] Exhibit "11-b" Id., p. 197.
[30] Exhibit "12" Id., p. 199.
[31] Annex "11" Rollo, p. 74.
[32] Annex "2" Id., pp. 36-45.
[33] Annex "3" Id., p. 47.
[34] Id., pp. 22-23.
[35] Eduarte vs. Court of Appeals, 311 SCRA 18 and Lagrosa vs. Court of Appeals, 312 SCRA 298.
[36] Spouses Zaragosa vs. Court of Appeals, 341 SCRA 309 and Ladignon v. Court of Appeals, 336 SCRA 42. Also See Apostol vs. Court of Appeals, 432 SCRA 351.
[37] Leyson vs. Bontuyan, 452 SCRA 94, 2005.
[38] Pro Line Sports Center, Inc. vs. Court of Appeals, 281 SCRA 16, 1997.
[39] 331 SCRA 267, 2000.
[40] Records, Dp. 58-59.
[41] Section 5, Rule 30 of the Rules of Civil Procedure provides that subject to the provisions of section of Rule 31, and unless the court for special reasons otherwise directs, the trial shall be limited to the issues stated in the pre-trial order and shall proceed as follows:
a. The plaintiff shall adduce evidence in support of his complaint;
b. The defendant shall then adduce evidence in support of his defense, counterclaim, cross-claim and third-party complaint;
c. The third-party defendant, if any, shall adduce evidence of his defense, counterclaim, cross-claim and fourth-party complaint;
d. The fourth-party; and so forth, if any, shall adduce evidence of the material facts pleaded by them:
e. The parties against whom any counterclaim or cross-claim has been pleaded, shall adduce evidence in support of their defense, in the order to be prescribed by the court. (Emphasis ours).